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The U.S. Postal Service will consolidate all mass-consumer creative at Foote, Cone & Belding, New York, as it tightens its ad budget for 2000. The shift takes effect Oct. 1.

Young & Rubicam will turn over its creative assignments, including corporate image, global delivery service and special services. However, Y&R units will continue to handle media buying and planning, and ethnic advertising.

The other two roster agencies, Frankel and Draft Worldwide, both Chicago, still have retail/Internet and direct marketing, respectively. But a postal service executive said all assignments have been "streamlined" because of the budget cut.

CAPITALIZING ON STRENGTHS

"Because of the reduction in the budget, we had to determine how to best manage the resources of our four agencies," said Judy De Torok, manager of marketing communications. "We wanted to capitalize on each of their strengths."

The postal service would not disclose how much it has cut its ad spending; the reduction previously had been reported at $50 million. The postal service said it spent $301 million on advertising-including non-media costs-in fiscal 1998, ended Sept. 30. It spent $140 million on measured media in 1998, according to Competitive Media Reporting.

All four agencies' reworked contracts are now effective through September 2000. The postal service plans a full review for 2001 that includes outside agencies. That review, which will have multiple requests for proposal, begins in January or February.

The shift of creative wasn't a surprise. Y&R's contract with the postal service ends Sept. 10 and the agency knew it was on shaky ground (AA, April 19).

NO FORMAL REVIEW

Linda Srere, Y&R vice chairman and chief client officer, sent a letter earlier this year appealing its case to postal service Chief Marketing Officer Allen Kane.

At that time, a Y&R spokesman said the agency would participate in a review.

There was no formal review for this shift; Ms. De Torok said the postal service has worked with all the agencies for many years and made the decision according to its needs and each agency's strengths.

FCB, which now handles assignments including Priority Mail and stamps, created the postal service's current theme, "Fly like an eagle," as a one-time assignment.

Ms. De Torok said the theme will continue, although new ads will also be created. She declined to elaborate on the new work.

One agency executive close to the situation said the Internet and electronic commerce will play a much more important role in the future of the postal service and its marketing efforts.